What insurance companies aren’t telling you about FEC charges

Photo by Eric Staszczak / KOMU News

If you’ve been following the headlines on the freestanding emergency center (FEC) debate in Texas, then you’ve probably missed the most important line of all: the by-line.

Insurance companies and their affiliates are fueling — and misleading — the debate regarding Texas FECs. In a recent article entitled “Freestanding ERs: Astronomical costs and statistics tell the real story,” Blue Cross/Blue Shield Chief Medical Officer Esteban Lopez argues that FECs are far more expensive than urgent care centers (an apples-to-oranges argument if ever there was one) and are gouging consumers at their times of greatest need. But there are holes in his argument and problems with his sources.

Lopez links repeatedly to a group called the Texas Association for Health Plans, a group built to promote health plans and the companies that offer them. Elsewhere, the Texans for Affordable Healthcare also generates articles and web pages about the financial straits patients may fall into when going to a freestanding emergency center. Their mission statement says that the group is a “healthcare advocacy coalition representing Texas employers, patients, consumer advocates, health plans, providers and others.” These organizations’ focus on representing the interests of health groups is problematic for consumers: health groups exist to make money, which can only happen by charging premiums and paying as little in claims as possible. Consumer interests and the interests of for-profit insurance groups are inherently at odds.

When you follow the money trail, it leads right back to “balance bills,” which are bills sent to patients for the balance of a claim that insurance companies won’t pay. The debate on FECs, then, requires a look at exactly how they charge and how insurance companies are required to pay:

FECs charge rates like hospital ERs — it's the law. Insurance companies are required by the Affordable Care Act to pay an amount equal to the greatest of:

1. The median amount health insurers pay in-network providers for emergency services furnished;

2. An amount based on the same methods used by health insurers generally used to pay for out-of-network services (e.g., usual and customary amounts); or

3. The amount Medicare would pay for the emergency services provided.

Insurance companies are not complying with this part of the ACA, and the Texas Department of Insurance (TDI) can prove it.

A recent analysis of 417 cases of over-charged balance bills reported to the TDI revealed that insurance companies were guilty of underpaying patients’ emergency room bills by an average of $1,096 and leaving patients responsible for the balance. It’s the insurance companies, not the FECs, that are responsible for categorizing and charging emergency care as in-network or out-of-network.

Patients aren't getting surprise ER bills — they're getting surprise insurance bills.

The issue of “surprise” bills caught the attention of Dr. Jon Steadman, chief medical officer at Emergis ER, a freestanding emergency center in Addison, Fort Worth, and Richardson. In an article entitled, “A Frank Discussion of ER Charges,” Dr. Steadman writes:

Here is where nobody in the public health arena seems willing to address the elephant in the room: Emergency department services are abused by many who either lack the understanding of what constitutes a healthcare emergency or have a decreased sense of responsibility for the cost of emergency department services and the impact it has on public healthcare costs.

After all the debate about FECs versus insurance groups, patients are still responsible for not choosing emergency care for medical issues that are not genuine emergencies. Consumers understand that they are walking into an ER; they just don’t understand the associated costs. Emergency-trained medical staff, MRIs and CT scanners all come at a price, and consumers pay that price when they come to any ER, freestanding or not. Patients bear responsibility for not treating emergency rooms as personal medicine cabinets for sore stomachs and bad coughs.

Yes, ER visits are expensive. Consumers are paying to have highly trained staff and millions of dollars’ worth of equipment and pharmaceuticals on hand to save their life. And that is why consumers need to start listening to ER doctors when they say that an injury or illness does not require emergency care.

Emergency rooms are always going to be expensive—whether they are attached to hospitals or not. But insurance companies are manipulating the conversation about paying for healthcare in in Texas by comparing FECs to urgent care centers, setting up a straw-man argument about how emergency rooms charge. Insurance companies are doing this in order to shift the focus away from how patients get balance bills in the first place: It’s because their insurance companies are willfully underpaying on their policies.

Jared Heath

Representative, Emergis ER